Canadian VPN services could be forced to alert pirating customers

It's unclear if VPN services will be forced to comply with the new Canadian Copyright Modernization Act.

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, Canada.com

It’s unclear if VPN services will be forced to keep customer records under Canada’s new Copyright Modernization Act.

Virtual Private Network (VPN) services are legal and until now, believed to be completely unregulated in Canada, making them particularly popular for internet users interested in online privacy protection, accessing geolocked content via streaming services like Netflix and U.S.-only Hulu, or for those interested in more nefarious activities like piracy-focused Torrent downloading or criminal activity.

However, new legislation, which went into effect on Jan. 1, doesn’t clearly state whether Canada’s Copyright Modernization Act pertains to VPN platforms in Bill C-11’s section 41.25 (a). An integral aspect of the new law requires internet service providers (ISPs) to relay copyright infringement allegations to customers (an act that has already been occurring for years), and to also keep a record of these allegations for six months in case the copyright holder makes the decision to take legal action.

On a basic level, a VPN is a subscription-based service that encapsulates and encrypts a user’s internet data transmissions, moving their web activity through a protected tunnel in order to create a private and secure environment for the user.

According to Michael Geist, Canada Research Chair in Internet and E-commerce, it’s unclear if Canadian VPN providers are required to send out “notice-and-notice” copyright infringement allegations to their customers.

“The issue of notice-and-notice and VPNs is complex. I’ve seen the same articles on the application of notice-and-notice. I think it is a matter of interpretation,” Geist said.

The section of the new Canadian Copyright Modernization Act in question reads as follows:

(a) the means, in the course of providing services related to the operation of the Internet or another digital network, of telecommunication through which the electronic location that is the subject of the claim of infringement is connected to the Internet or another digital network…”

Geist explained the issue comes down to whether or not a VPN is considered a means of providing telecommunications and that the new law can be argued either way. Since the VPN user’s internet connection runs through the service, technically it could be considered a provider, and it’s unclear if VPN providers, are part of this new notice-and-notice system too.

“They are one party that provides the means of communication, but so do many others on the path from the initial ISP to the site and back to the ISP. However, the intent of the statute was likely to cover the ISP or network provider that provides the Internet user with the original means of telecommunications. There was no discussion that I can recall involving VPNs during the committee hearings,” said Geist.

Because of this ambiguity, Geist thinks few VPN providers based in Canada (or operating within Canada) will feel compelled to comply with the new law. In fact, doing so is impossible for many since most VPN services don’t retain the IP address record necessary to follow the new law.

However, this hasn’t stopped Barbados-based VPN provider Netprotect Inc. – the creators of popular DNS geoblocking platform, Unblock-Us – from moving their company, originally founded and located in Toronto, out of Canada to avoid potential legal issues.

“We strongly support anonymity and privacy. After learning about pending Canadian legislation requiring VPN providers to keep logs for 6 months, we made the decision to move the brand to Netprotect Inc. in Barbados where there is a better privacy environment,” reads a statement from Netprotect Inc.

TunnelBear, a Toronto-based VPN service, is taking a different approach to dealing with the new Canadian Copyright Modernization Act, explaining that despite the legislation limiting the amount of money a copyright holder can seek from the average Canadian — $5,000 for downloading copyrighted material for personal use and $20,000 for downloading copyrighted content leading to commercial gain — the company believes the new law prioritizes the protection of copyright holders over the privacy of Canadian citizens.

“We think it’s still unclear whether VPN companies fall under Bill C11’s description of Internet Service Providers. We hope to have legal consultation which clarifies this. Additionally, TunnelBear is different from many VPN providers. We have an online privacy focus and do not allow torrents on our network. Torrents have historically put pressure on our service to log users activity due to DMCA and now Bill C11. By not allowing torrents, we receive little to no DMCA notices and expect to receive little to no C11 notices,” said TunnelBear’s co-founder Ryan Dochuk.

Dochuk also explained it’s more difficult for VPN providers to monitor their customers, unlike ISPs, because the technology allows multiple users to share one IP address, making it impossible to identify individual users. And like many VPN services focused on privacy, TunnelBear operates with a strict no-logging policy. This means that if the company was asked to hand over subscriber IP address information, it actually couldn’t.

“If it is determined that we are required to comply with C11 then we will cease offering service from Canadian endpoints (VPN Servers). At no point, under any circumstances will TunnelBear log the activity of our users,” said Dochuk.

Geist warns the issue of whether or not Canadian VPN services, or even providers not based in Canada, will be forced to comply with the Copyright Modernization Act, is a matter that may end up being decided in court some day.

Over the next few years virtual private networks could potentially become significantly less private in Canada.

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